Apple iTunes Radio will expand to Canada and UK in 2014, which should make Pandora nervous

Prior to the launch of iTunes Radio, former Pandora CEO Joe Kennedy claimed his company wasn't worried about the looming competition from Apple because his company had seen "competitors large and small" come and go during their eight years of operation. However, early numbers from iTunes radio show that the service is rapidly gaining fans in the U.S., and it has plans for international expansion that could eventually slow Pandora's growth.

Bloomberg reports that Apple will launch iTunes Radio in Canada and the United Kingdom by early 2014. According to unnamed sources, Apple has secured international streaming rights from music conglomerates rather than Pandora's approach of achieving deals with music publishers through rights granted by individual governments. Pandora is available only in the U.S., Australia, and New Zealand because the web of licensing deals it takes to launch in more countries is costly and difficult to secure. Apple on the other hand has the money and negotiating power to get deals done more readily.

Despite growing popularity in the personal radio industry, a niche that Pandora has owned for years, Pandora has not managed to launch in many countries. Apple is expected to be in 100 countries eventually, and it will start with two large markets early next year. With Apple being first to market, it will make things even harder for Pandora when it tries to launch in more nations. It's difficult to achieve success when competing with a larger company or an established product. Pandora will be up against an established product made by a larger company.

More than 11 million people listened to iTunes Radio during the streaming service's first launch week. At the moment, there's no need for Pandora to panic because it's September audience metrics reveal that the company has 72.7 million unique listeners. Pandora will also have a larger following for the foreseeable future because it is available on iOS, Android, Windows Phone, and the web, while iTunes Radio streams only to Apple devices.

Pandora has built a loyal following in the U.S. based on its reputation and ability to grow despite challenges from Spotify, Rdio, Slacker, and a host of others. Apple represents the biggest threat yet; not because it grabbed a few million people within a few days, but because it could grab millions more in markets Pandora has yet to reach. Eventually, Pandora will need to cast its net farther outside of the U.S., and letting Apple get a headstart might make it harder for Pandora to be as successful globally as it is at home.